Relevant dates
Windfall Gains Tax commences relates to contracts entered into after 15 May 2021 for land over 2 hectares that is rezoned from 1 July 2023.
Who pays?
The owner of the land at the date of the assessment is liable to pay the tax.
For land subject to a contract entered into after 15 May 2021, this could be a purchaser if settlement has been completed, or the vendor if the contract is still on foot.
Any contracts that developers or vendors are signing now need to take this tax into account and address issues of who pays in the contract.
Amount of the tax
The tax that is applied depends on the value of the uplift. The uplift is determined based on the council rates valuations of the land. Consider reviewing council rates values with this in mind to potential land.
- If the uplift is more than $100,000 but less than $500,000 the tax will be 5% of the uplift above $100,000.
- For uplifts of $500,000 or more a tax rate of 50% will apply to the total uplift.
When the tax is payable
The tax is payable within 30 days of assessment but can be deferred with interest for up to 30 years.
Any deferred tax will become payable if the property is sold.
Other time limits
- Tax is payable within 30 days of assessment
- Objections to the assessment need to be made within 60 days
- Deferred period is 30 years
Further information is available here or please contact Oakhill Lawyers to discuss your needs.